Turkey

As WSJ reports, "the European Union on Wednesday proposed redistributing 160,000 refugees across the bloc and speeding up procedures to send back those who don’t qualify for asylum, in a bid to improve a stuttering response to the largest wave of migration on the continent since the aftermath of World War II."

The prosecution of a Swedish national accused of terrorist activities in Syria has collapsed at the Old Bailey after it became clear Britain’s security and intelligence agencies would have been deeply embarrassed had a trial gone ahead, the Guardian reported.  "The prosecution abandoned the case, apparently to avoid embarrassing the intelligence services. The defence argued that going ahead with the trial would have been an “affront to justice” when there was plenty of evidence the British state was itself providing “extensive support” to the armed Syrian opposition. That didn’t only include the “non-lethal assistance” boasted of by the government (including body armour and military vehicles), but training, logistical support and the secret supply of “arms on a massive scale”."

The refugee crisis in Europe - sparked in large part by Syria’s four-year old, bloody civil war - recently reached a tipping point and the scramble to find a workable solution both in terms of allocating asylum seekers and finding the funds to accommodate them has become the single most pressing challenge facing European policy makers. Amid the chaos, Goldman may have found the silver lining. 

For the fifth time in two decades, Turkish soldiers have launched a ground incursion into Iraq in pursuit of PKK "terrorists" who have orchestrated a series of deadly attacks on security personnel over the past several days. Of course Turkish soldiers aren't the only ones fighting Kurds in Iraq. So is ISIS. And that means that just like in Syria, Turkey (with Washington's implicit blessing) is at best distracting from and at worst impeding the battle against Islamic State, the same Islamic State which is being used by Ankara as a cover for the PKK crackdown.  

One can only hope they will continue to remain “behind schedule”. Haven’t these hapless planners done enough damage yet?

Today the US made a dramatic diplomatic escalation ahead of what is now assured to be the second major showdown between the US and Russia in Syria, over a Qatari gas pipeline no less, when according to Reuters, it asked Greece to deny Russia the use of its airspace for supply flights to Syria, a Greek official said on Monday, after Washington told Moscow it was deeply concerned by reports of a Russian military build up in Syria.

The violence in two of the world's conflict hot spots escalated materially over the weekend after a Houthi rocket attack in Marib killed 45 UAE soldiers, prompting the delpoyment of an additional 1,000 Qatari troops and triggering stepped up Saudi airstrikes. Meanwhile, in Turkey, roadside bombings blamed on the PKK mean Ankara will look to plunge the country deeper into civil war ahead of elections in November. 

Filed under 'what the f##k?', French President Francois Hollande is preparing for air strikes in Syria in a somewhat mind-numbing approach to to stem a flood of refugees from the Middle East into Europe. Using the always-ready excuse of "grappling with the threat of terrorism," Bloomberg reports Hollande's response to Europe’s biggest refugee crisis since World War II by increasing the bombing of the very place from which the refugees are fleeing...

For anyone who (still) believes that Canada has a diversified economy...

Amid reports that Russia is building a substantial military presence in Syria, a worried John Kerry called Sergei Lavrov on Saturday. Here, according to the State Department, is what was said: "The secretary made clear that if such reports were accurate, these actions could further escalate the conflict, lead to greater loss of innocent life, increase refugee flows and risk confrontation with the anti-ISIL coalition operating in Syria."

Over the past 48 hours or so, we’ve seen what certainly appears to be visual confirmation of a non-negligible Russian military presence in Syria. Going into the weekend however, Russia had yet to confirm publicly that it had commenced military operations in the region despite the fact that it’s the next closest thing to common knowledge that at the very least, the Kremlin has provided logistical support and technical assistance for a period that probably spans two or more years. But on Friday, Vladimir Putin looks to have confirmed the scope of Russia’s military role, even if he stopped short of admitting that Russian troops are engaged in combat.

Meanwhile, in Turkey...

"There is a general understanding that joint efforts in the fight against terrorism should go hand by hand with the political process in Syria. Assad agrees to this and has also agreed to early parliamentary elections and to include healthy opposition." 

Moments ago, US equity futures tumbled to their lowest level in the overnight session, down 22 points or 1.1% to 1924, following both Europe (Eurostoxx 600 -1.8%, giving up more than half of yesterday's gains, led by the banking sector) and Japan (Nikkei -2.2%), and pretty much across the board as DM bonds are bid, EM assets are all weaker, oil and commodities are lower in what is shaping up to be another EM driven "risk off" day. Only this time one can't blame the usual scapegoat China whose market is shut for the long weekend.